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NAB’s Smith Hopes for Music Royalty Compromise

A rate that destroys local radio “is a bad thing,” says NAB executive

As the performance rights issue looms when lawmakers return to Capitol Hill, the issue remains a “challenge” for radio.

That’s according to NAB President/CEO Gordon Smith, who tells C-SPAN’s “Communicators” program, “Hopefully the day will arrive when both the digital and the terrestrial platform can come up with a model that actually grows music and works for both.”

“Right now, one has an unsustainable business model,” according to Smith, referring to the Internet audio services like Pandora. Terrestrial radio’s model works for stations, however “it needs to work for performers too,” he says.

“But if you provide a rate that simply destroys local radio, that is a bad thing. We can’t stand idly by for that,” Smith says. Some major NAB radio members like Clear Channel and Entercom are negotiating their own label deals, “so a market is starting to develop,” according to the trade group executive.

Rep. Mel Watt. D-N.C., had planned to introduce a performance royalty bill before lawmakers left town for the August recess.